Selling property in Spain as a non-resident can be a complex process, filled with various tax implications and legal requirements. Understanding these aspects is crucial for a smooth transaction. This article aims to provide an in-depth look at the key factors non-resident sellers should consider, including the 3% withholding tax, capital gains tax calculations, municipal plusvalia, and essential certifications required.
The 3% withholding tax
When a non-resident sells a property in Spain, the buyer is required to withhold 3% of the sale price and pay it to the Spanish tax authorities as a safeguard against the seller’s potential capital gains tax liabilities. This amount is deducted from the selling price at the time of sale. The seller can later adjust this against their actual capital gains tax liability, or if applicable, request a refund.
Calculating Capital gains tax
Capital gains tax is levied on the gain from the sale of the property. It is calculated by subtracting the purchase price (including associated costs and improvements) from the sales price (less associated costs). The tax rate applicable to non-residents is currently 19%.
Municipal Plusvalia tax
This local tax is paid to the municipal government where the property is located. It is based on the increase in the value of the land from the time you acquired the property until the time of the sale. The amount varies depending on the municipality, and there are currently two methods of calculation, one based on the real value and the other on coefficients, that is given by the municipality, being possible to choose the most beneficial one.
In the following article we discuss this tax in more detail -> Plusvalia municipal: Understanding this tax on real estate in Spain.
Energy efficiency certificate
Sellers are required to provide an Energy Efficiency Certificate (Certificado de Eficiencia Energética) before selling. This document assesses the energy efficiency of the property and is mandatory for all sales in Spain.
Community certificate
If the property is part of a community of owners, a Community Certificate (Certificado de Comunidad) is needed. This document proves that the seller is up-to-date with community fees and there are no outstanding debts.
Other considerations
- Agency commission: This commission is payable by the seller and the standard amount in Costa del Sol is 5% plus vat on the sales price.
- Cancellation of any charge: it is the seller’s obligation to take care of any debts that the property may have, such as the mortgage cancellation or the cancellation of any potential embargo. (If you want to know more about mortgages for expats in Spain, click here and you can read our article).
- Title Deed: Ensure that the title deed is updated and accurately reflects the property’s current state.
- Tax Office Obligations: Non-residents must declare the sale to the tax office using Form 211 for the withholding tax and Form 210 for capital gains tax.
- Non-Resident Income Tax: If you are a non-resident in Spain, different tax rules apply, including the non-resident income tax.
Conclusion
Selling a property in Spain as a non-resident involves several tax obligations and legal requirements. It’s crucial to understand these aspects to ensure compliance and a successful property transaction. Consulting with a specializing real estate lawyer and immigration lawyer can provide valuable assistance and peace of mind during the process.
Do you have any question about Selling property in Spain?
Are you a non-resident looking to sell property in Spain? Selling property in Spain as a non-resident can be a complex process, filled with various tax implications and legal requirements. In this video, we cover crucial topics like the 3% withholding tax, calculating capital gains tax, municipal plusvalía tax, and required certifications.
